South America: Boom or Bust?

South America: Boom or Bust?

27 February, 2008 | 2.59PM

• Section: Music News Topics: Beatport Blog, South American Music Conference
• Written by: Christen Reutens

Next week [March 6th - 10th] the Beatportal team will be reporting live from the South American Music Conference (SAMC) in Argentina, one of the region’s biggest and most important dance music meetings.

There are questions we have about South America’s electronic music scene, many of which we hope will be answered by a trip to Buenos Aires where we’ll meet with some of the most important producers, DJs, promoters and record label owners.

The most pressing question is - Is the continued digitalisation of electronic music undermining the sustainability of the dance scene in a region where music piracy is rife? 

Music Piracy

In 2003 the IFPI, who represent some 1400 worldwide members of the recording industry, named and shamed the top 10 worst countries for music piracy.

Three out of the top five were based in Latin America; Brazil, Mexico and Paraguay.

At the time, the IFPI report stated: “Brazil and Mexico also stand out among worst-affected markets, with massive sales of pirate music that far exceed their legitimate markets…Paraguay is the gateway for massive pirate imports and exports for South America.”

Whilst the arrival of digital music distribution has led to a huge increase in legal music purchases, it too has made music piracy easier.

Previously, pirated CDs and tapes required a sophisticated manufacturing, distribution and retail network. It was an industry in itself.

Now, the ease with which users can download, re-upload and share MP3s has given rise to a new, more dangerous form of music piracy, P2P websites and more recently, MP3 blogs.

It is individuals not companies who are the music pirates now, and their impact is global, not local.

There is an argument that says that illegal downloading is in part caused by a lack of supply – people can’t find what they’re looking for on legal download sites (eg: bootlegs, white labels) so they search the web to try and find what they want.

Illegal MP3 blogs – who operate under the rather weak pretense that they are supporting artists and labels by promoting their music by giving it away for free – have become very popular in a short space of time due to this gap in the market.

Income, Wealth Distribution and Credit Cards

But for South America, there is an argument that must hold water; relatively low income, poor wealth distribution and the scarcity of credit cards leaves much of the population with no option but to sneak beats on the DL.

The proof is in the stats.

Credit card penetration is positively correlated with economic growth, and many Latin American countries (for example, Brazil and Mexico) have large unbanked or under-banked populations. 

Credit card penetration in Brazil – that’s the amount to which credit or charge cards are used for purchasing – grew by 168% between 1998 and 2005 [source: Economist Intelligence Unit; European Marketing Data and Statistics (Euromonitor International, 2007); International Marketing Data and Statistics, (Euromonitor International, 2007), and Visa International.]

Yet, despite this growth, the overall credit card market remains pretty low at 0.38% of the overall consumer spend, and the Internet is powered by electronic transactions.

Then there is the average annual income of the region.

SAMC is taking place in Argentina, a country with a GDP per capita of $6,548 (source: Wikipedia).

By comparison, the average annual income in the United States and the United Kingdom is around $45,000.

So electronic music fans who wish to use Beatport in South America for example, face a two fold barrier to entry if they wish to buy music.

First they have to be prepared to give up a significant amount of money to download a track in US dollars - it is pretty expensive considering the currency conversion.

Plus they also need a credit card (or a PayPal account) to pay for the music.

South American Passion, Energy & Creativity

Whilst illegal downloading has a huge impact on record labels and artists whose creative output relies upon their ability to earn some money for their hard work, a healthy local dance scene needs clubs, events and enthusiasm.

Energy and passion for music and dancing is something the South Americans aren’t short of.

The region has a long and vibrant history with dance: Mambo, Salsa, Cha-cha-cha, Rumba, Flamenco, Tango - they all come from the continent, and all are social dances designed for parties that celebrate life.

The climate too is suited to a burgeoning dance scene. It’s no coincidence that the hot and sunny centres of Miami and Ibiza have become destination hot spots for clubbers – when the sun shines, you always feel like partying.

A kicking electronic music scene also needs creativity, which South America has in abundance too.

Stars like Luciano, Ricardo Villalobos, Pier Bucci and Gui Boratto [pictured] have all collectively rewritten the rule book on minimal and techno in the last few years, by fusing melodies, exotic rhythms, intricate sounds and vocals into their music.

Their impact too has been global and proves that the notion - that globalization is a cultural dominance from the West to the rest - is flawed.

DJ culture & the spread of electronic music

The DJ industry in South America too is fairly well developed.

There are DJ institutes like Escuela Sonica in Buenos Aires and DJ School in Santiago, Chile where aspiring DJs can hone their skills.

And electronic music can be found in every corner of the continent.

There’s a highly developed psy trance scene in Brazil, which has made great use of the country’s warmer climate by utilising outdoor events and beach parties.

D-Edge and Warung Beach in Brazil are considered to be some of the best clubs in the world, and there’s even a Brazilian version of Britain’s DJ Magazine.

Here’s a video of Dubfire destroying Warung Beach in February - check out how many people are in the DJ booth.

Dubfire destroys Warung Beach

Colombia has a strong house and electro scene with labels like Trebol having produced some great music.

Uruguay is known for its house music too.

Next Week: Beatportal’s SAMC Live Blog

So there is much to be excited about for South American electronic music, but there are underlying social and economic issues that need to be investigated.

We hope that our live SAMC blog next week will help us answer some of these questions.

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